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      Question

      Why must auditors obtain an understanding of internal

      control even if they do not intend to rely on it?
      A Because law requires it. Correct Answer Incorrect Answer
      B To identify risks of material misstatement and design appropriate audit procedures. Correct Answer Incorrect Answer
      C To reduce sampling risk. Correct Answer Incorrect Answer
      D To avoid reliance on substantive testing. Correct Answer Incorrect Answer
      E Only to satisfy regulators. Correct Answer Incorrect Answer

      Solution

      Understanding internal control helps assess risks of material misstatement and design audit procedures, even if controls are not tested for reliance.

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